The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) takes no responsibility for the contents of thiscircular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoeverfor any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult astockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant, or otherprofessional adviser.
If you have sold all your shares in Convenience Retail Asia Limited, you should at once hand this circular to thepurchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to thepurchaser.
CONVENIENCE RETAIL ASIA LIMITED
(Incorporated in the Cayman Islands with limited liability)
CONTINUING CONNECTED TRANSACTIONSAND
GENERAL MANDATES TO ISSUE AND REPURCHASE SHARESAND
NOTICE OF ANNUAL GENERAL MEETING
Independent financial adviser to the Independent Board Committee
A letter from the Independent Board Committee is set out on page 18 of this circular. A letter from Watterson AsiaLimited containing its advice to the Independent Board Committee is set out on pages 19 to 22 of this circular.
A notice convening the Annual General Meeting of the Company to be held at the Auditorium, 12th Floor, LiFungCentre, 2 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong on 28 April 2003 at 4:00 p.m. is setout on pages 41 to 46 of this circular. Whether or not you are able to attend the Annual General Meeting, pleasecomplete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it tothe branch share registrar of the Company, Abacus Share Registrars Limited, at Ground Floor, Bank of East AsiaHarbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as possible and in any event, not less than48 hours before the time appointed for holding the Annual General Meeting. Completion and return of the form ofproxy will not preclude you from attending and voting in person at the Annual General Meeting should you so wish.
This circular, for which the directors (“Directors”) of Convenience Retail Asia Limited (the “Company”) collectivelyand individually accept full responsibility, includes particulars given in compliance with the Rules Governing theListing of Securities on the Growth Enterprise Market of the Stock Exchange for the purpose of giving informationwith regard to the Company. The Directors of the Company, having made all reasonable enquiries, confirm that, tothe best of their knowledge and belief, (i) the information contained in this circular is accurate and complete in allmaterial aspects and not misleading; (ii) there are no other matters the omission of which would make any statementin this circular misleading; and (iii) all opinions expressed in this circular have been arrived at after due and carefulconsideration and are founded on bases and assumptions that are fair and reasonable.
This circular will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for7 days from the date of its posting and on the website of the Company at www.cr-asia.com.
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION R.20.46(3)(b)
R.20.47(1)R.2.19
R.20.46(3)(b)
App. 1B(1)
App.1B(2)
31 March 2003
GEM has been established as a market designed to accommodate companies to which a high
investment risk may be attached. In particular, companies may list on GEM with neither a track
record of profitability nor any obligation to forecast future profitability. Furthermore, there may
be risks arising out of the emerging nature of companies listed on GEM and the business sectors
or countries in which the companies operate. Prospective investors should be aware of the
potential risks of investing in such companies and should make the decision to invest only after
due and careful consideration. The greater risk profile and other characteristics of GEM mean
that it is a market more suited to professional and other sophisticated investors.
Given the emerging nature of companies listed on GEM, there is a risk that securities traded
on GEM may be more susceptible to high market volatility than securities traded on the Main
Board and no assurance is given that there will be a liquid market in the securities traded on
GEM.
The principle means of information dissemination on GEM is publication on the internet
website operated by the Stock Exchange. Listed companies are not generally required to issue
paid announcements in gazetted newspapers. Accordingly, prospective investors should note that
they need to have access to the GEM website in order to obtain up-to-date information on
GEM-listed issuers.
CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE
— i —
R.20.47(2)R.2.20
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Schedule to Letter from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Letter from Watterson Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
CONTENTS
— ii —
In the circular, the following expressions have the following meanings unless the context requires
otherwise:
“AGM” the annual general meeting of the Company for the year ended
31 December 2002 to be held at the Auditorium, 12th Floor,
LiFung Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New
Territories, Hong Kong on 28 April 2003 at 4:00 p.m.
“associates” has the meaning ascribed to it in the GEM Listing Rules
“Board” the board of directors of the Company or a duly authorised
committee thereof
“Bomaron” Bomaron Limited, a company incorporated in Hong Kong, an
indirect subsidiary of LF (1937) which has an effective
interest of 51.44% in Bomaron Limited
“Circle K (HK)” Circle K Convenience Stores (HK) Limited, a company
incorporated in Hong Kong and wholly owned by the
Company
“Company” Convenience Retail Asia Limited
“Continuing Connected
Transactions”
(i) the letter agreement made between Circle K (HK) and LF
(Management) under the New Circle K (HK) Lease and (ii)
the letter agreement made between Web-Logistic (HK) and LF
(Management) under the New Web-Logistic Lease
“Directors” the directors of the Company
“Existing Circle K (HK) Lease” the letter agreement dated 29 June 2000 entered into between
Circle K (HK) and Bomaron whereby Circle K (HK) agreed to
lease from Bomaron a portion of 5th Floor, LiFung Centre, 2
On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong
Kong with a gross floor area of 20,723 sq.ft for a term of three
years commencing on 1 August 2000 and expiring on 31 July
2003
“Existing Leases” the Existing Circle K (HK) Lease and the Existing Web-
Logistic Lease
“Existing Web-Logistic Lease” the letter agreement dated 29 June 2000 entered into between
Web-Logistic (HK) and Bomaron whereby Web-Logistic (HK)
agreed to lease from Bomaron a portion of 5th Floor, LiFung
Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New
Territories, Hong Kong with a gross floor area of 12,667 sq.ft
for a term of three years commencing on 1 August 2000 and
expiring on 31 July 2003
DEFINITIONS
— 1 —
“GEM” the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules” the Rules Governing the Listing of Securities on GEM
“Group” the Company and its Subsidiaries
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” The Hong Kong Special Administrative Region of the PRC
“IFA” or “Watterson Asia” Watterson Asia Limited, an investment adviser and dealer
registered under the Securities Ordinance (Chapter 333 of the
Laws of Hong Kong) and the independent financial adviser to
the Independent Board Committee
“Independent Board Committee” an independent committee of the Board comprising Dr. Ch’ien
Kuo Fung, Raymond and Mr. Au Man Chung, Malcolm and
Mr. Godfrey Ernest Scotchbrook who are the independent
non-executive Directors
“Independent Shareholders” Shareholders other than those who have an interest in the New
Leases and the Continuing Connected Transactions
thereunder (including, without limitation, LFR, Mr. Lau Butt
Farn and their respective associates in relation to the Existing
and New Leases)
“Latest Practicable Date” 25 March 2003, being the latest practicable date prior to the
printing of this circular for ascertaining certain information
contained herein
“LF (1937)” Li & Fung (1937) Limited, a company incorporated in Hong
Kong
“LF (Distribution)” Li & Fung (Distribution) Limited, a holding company of
Bomaron and LF (Management), and a company incorporated
in the British Virgin Islands, an indirect subsidiary of LF
(1937) which has an effective interest of 51.44% in LF
(Distribution)
“LF (Management)” Li & Fung Distribution (Management) Limited, a company
incorporated in Hong Kong, an indirect subsidiary of LF
(1937) which has an effective interest of 51.44% in LF
(Management)
“LFR” Li & Fung (Retailing) Limited, a company incorporated in
Hong Kong and wholly-owned by LF (1937)
DEFINITIONS
— 2 —
“Li & Fung Group” LF (1937) and its Subsidiaries together with Li & FungLimited and its Subsidiaries. Li & Fung Limited is anassociated company of LF (1937) and is listed on the MainBoard of the Stock Exchange
“New Circle K (HK) Lease” a letter agreement dated 20 March 2003 entered into betweenLF (Management) as head tenant, Circle K (HK) as sub-tenantand Bomaron whereby Circle K (HK) agreed to sub-leasefrom LF (Management) a portion of 5th Floor, LiFung Centre,2 On Ping Street, Siu Lek Yuen, Shatin, New Territories,Hong Kong with a gross floor area of 20,723 sq.ft. for arevised term from 1 May 2003 to 31 May 2004
“New Leases” the New Circle K (HK) Lease and the New Web-LogisticLease
“New Web-Logistic Lease” a letter agreement dated 20 March 2003 entered into betweenLF (Management) as head tenant, Web-Logistic (HK) assub-tenant and Bomaron whereby Web-Logistic (HK) agreedto sub-lease from LF (Management) a portion of 5th Floor,LiFung Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, NewTerritories, Hong Kong with a gross floor area of 12,667 sq.ft.for a revised term from 1 May 2003 to 31 May 2004
“PRC” The People’s Republic of China, for the purpose of thiscircular, excluding Hong Kong, The Macau SpecialAdministrative Region and Taiwan
“Premises” the property subject to the Existing Leases
“Prospectus” the prospectus of the Company dated 9 January 2001
“Share(s)” share(s) of HK$0.10 each in the capital of the Company
“Shareholder(s)” holder(s) of the Share(s)
“Stock Exchange” The Stock Exchange of Hong Kong Limited, a wholly-ownedsubsidiary of Hong Kong Exchanges and Clearing Limited
“Subsidiary” a body corporate which is for the time being a subsidiarywithin the meaning of the Companies Ordinance (Cap. 32 ofthe Laws of Hong Kong)
“Waiver” the waiver granted by the Stock Exchange to the Company inJanuary 2001 of the announcement and Shareholders’approval requirements, under Rules 20.35 and 20.36 of theGEM Listing Rules in relation to the non-exempt connectedtransactions as disclosed in the Prospectus
“Web-Logistic (HK)” Web-Logistic (HK) Limited, a company incorporated in HongKong and owned as to 82% by the Company
DEFINITIONS
— 3 —
CONVENIENCE RETAIL ASIA LIMITED
(Incorporated in the Cayman Islands with limited liability)
Executive Directors:
Yeung Lap Bun, Richard (Chief Executive Officer)
Li Kwok Ho, Bruno (Chief Financial Officer)
Non-executive Directors:
Dr. Fung Kwok King, Victor (Chairman)
Dr. Fung Kwok Lun, William
Lau Butt Farn
Wong Yuk Nor, Louisa
Independent non-executive Directors:
Dr. Ch’ien Kuo Fung, Raymond
Au Man Chung, Malcolm
Godfrey Ernest Scotchbrook
Registered Office:
Century Yard
Cricket Square
Hutchins Drive
P.O. Box 2681GT
George Town
Grand Cayman
British West Indies
Principal Place of Business:
12th Floor
LiFung Centre
2 On Ping Street
Siu Lek Yuen
Shatin
New Territories
Hong Kong
31 March 2003
To the Shareholders
Dear Sir or Madam,
CONTINUING CONNECTED TRANSACTIONSAND
PROPOSED GENERAL MANDATES TO ISSUEAND
REPURCHASE SHARES
INTRODUCTION
Reference was made to the announcement of the Company dated 20 March 2003 relating to the
New Leases. The Directors would like to seek the Independent Shareholders’ approval of the New
Leases, the Continuing Connected Transactions and their respective annual caps.
LETTER FROM THE CHAIRMAN
— 4 —
The purpose of this circular is (i) to provide information on the New Leases and the Continuing
Connected Transactions; (ii) to seek the Independent Shareholders’ approval of resolutions relating to
the New Leases and the Continuing Connected Transactions to be proposed at the AGM; and (iii) to
seek the Shareholders’ approval of the resolutions relating to the General Mandates and the
Repurchase Mandate (as defined below) at the AGM.
In view of the interests of LFR and Mr. Lau Butt Farn in the Existing Leases and New
Leases and the Continuing Connected Transactions, LFR, Mr. Lau Butt Farn and their respective
associates will abstain from voting at the AGM in respect of the resolutions regarding the
Existing Leases and New Leases.
THE CONTINUING CONNECTED TRANSACTIONS
The Existing Leases
As disclosed in the Prospectus, Circle K (HK) and Web-Logistic (HK) had respectively entered
into the Existing Circle K (HK) Lease and the Existing Web-Logistic Lease with Bomaron both on 29
June 2000. LFR is the substantial and a management Shareholder of the Company and both Bomaron
and LF (Management) are indirect subsidiaries of LF (1937) which is the holding company of LFR.
The transactions under the Existing Leases constituted non-exempt connected transactions under Rule
20.26 of the GEM Listing Rules, and were subject to the reporting, announcement and shareholders’
approval requirements set out in Rules 20.34 to 20.36 of the GEM Listing Rules. The Company had
applied for and obtained the Waiver from the Stock Exchange from strict compliance with the
reporting, announcement and shareholders’ approval requirements under the GEM Listing Rules in
January 2001 in respect of those transactions on the conditions as described in the Prospectus. The
Waiver expired on 31 December 2002 but the Existing Leases will only expire on 31 July 2003.
The monthly rent (exclusive of management fee and government rates) payable under the
Existing Circle K (HK) Lease and the Existing Web-Logistic Lease is HK$82,892.00 and
HK$50,668.00 respectively. The total consideration payable by the Group under the Existing Leases
for their remaining terms after the Waiver expired on 31 December 2002 will add up to exceed the de
minimis threshold under Rule 20.25(3) of the GEM Listing Rules in or around mid June 2003.
Accordingly, the residue lease term of the Existing Leases will constitute non-exempt continuing
connected transactions under Rule 20.26 of the GEM Listing Rules, and will again be subject to the
reporting, announcement and shareholders’ approval requirements under Rules 20.34 to 20.36 of the
GEM Listing Rules in or around mid June 2003.
The New Leases and termination of the Existing Leases
Each of Bomaron and LF (Management) is a wholly-owned subsidiary of LF (Distribution).
Pursuant to an internal re-arrangement of the property leasing and management activities of Bomaron,
Bomaron has entered into two new head leases with LF (Management) whereby the Premises will be
leased to LF (Management) when the New Leases take effect on 1 May 2003.
LETTER FROM THE CHAIRMAN
— 5 —
R.20.47(3)(d)R.20.47(5)
R.20.46(1)
Incidental to such internal restructuring of property leasing and management activities, and to
secure the continual use of the Premises, each of Circle K (HK) and Web-Logistic (HK), a subsidiary
of the Company, has respectively entered into the New Circle K (HK) Lease and the New Web-Logistic
Lease with Bomaron and LF (Management), both dated 20 March 2003 in respect of the Premises on
the same rent under the Existing Leases for a revised term from 1 May 2003 to 31 May 2004. Pursuant
to the New Leases, the parties have also agreed to early terminate the Existing Leases before the
expiration of their original terms on 31 July 2003. The termination of the Existing Leases will be
effective when the New Leases become unconditional and effective on 1 May 2003.
The total consideration payable under the New Leases will exceed the de minimis threshold
under Rule 20.25(3) of the GEM Listing Rules. Accordingly, the New Leases will constitute
non-exempt continuing connected transactions of the Company under the GEM Listing Rules and are
subject to the approval of the Independent Shareholders and other reporting requirements under Rules
20.34 to 20.36 of the GEM Listing Rules.
Particulars of the Continuing Connected Transactions
A. The New Circle K (HK) Lease dated 20 March 2003
Landlord : Bomaron
Head Tenant : LF (Management)
Sub-tenant : Circle K (HK)
Subject premises : a portion of 5th Floor, LiFung Centre, 2 On Ping Street,
Siu Lek Yuen, Shatin, New Territories, Hong Kong
Gross floor area : approximately 20,723 sq.ft.
Term : thirteen (13) months commencing on 1 May 2003 and expiring on
31 May 2004
Rent : HK$82,892.00 per month (exclusive of management fee and
government rates) payable in advance on the first day of each
month
The management fee for the premises is currently at HK$29,012.20 per month which amount is
subject to review and payable in advance on the first day of each month to the Head Tenant. The
government rates for the premises is currently at HK$13,629.24 per quarter which amount is
subject to review and payable quarterly in advance to the Head Tenant. It is expected that the
aggregate consideration payable by Circle K (HK) for the four months up to 30 April 2003 under
the Existing Circle K (HK) Lease and the first eight months of the lease ending 31 December
2003 under the New Circle K (HK) Lease, and for the following five months up to 31 May 2004
in the year ending 31 December 2004 under the New Circle K (HK) Lease will not exceed
HK$2,000,000 and HK$840,000 respectively, and such amounts have accordingly been set as the
annual caps of the New Circle K (HK) Lease for the relevant years.
LETTER FROM THE CHAIRMAN
— 6 —
R.20.47(3)(a)
R.20.47(3)(a)R.20.47(3)(c)
R.20.47(9)
B. The New Web-Logistic Lease dated 20 March 2003
Landlord : Bomaron
Head Tenant : LF (Management)
Sub-tenant : Web-Logistic (HK)
Subject premises : a portion of 5th Floor, LiFung Centre, 2 On Ping Street,Siu Lek Yuen, Shatin, New Territories, Hong Kong
Gross floor area : approximately 12,667 sq.ft.
Term : thirteen (13) months commencing on 1 May 2003 and expiring on31 May 2004
Rent : HK$50,668.00 per month (exclusive of management fee andgovernment rates) payable in advance on the first day of eachmonth
The management fee for the premises is currently at HK$17,733.80 per month which amount is
subject to review and payable in advance on the first day of each month to the Head Tenant. The
government rates for the premises is currently at HK$8,330.92 per quarter which amount is
subject to review and payable quarterly in advance to the Head Tenant. It is expected that the
aggregate consideration payable by Web-Logistic (HK) for the four months up to 30 April 2003
under the Existing Web-Logistic Lease and the first eight months of the lease ending 31
December 2003 under the New Web-Logistic Lease, and for the following five months up to 31
May 2004 under the New Web-Logistic Lease in the year ending 31 December 2004 will not
exceed HK$1,200,000 and HK$500,000 respectively and such amounts have accordingly been set
as the annual caps of the New Web-Logistic Lease for the relevant years.
The total consideration payable under the New Leases will exceed the de minimis threshold
under Rule 20.25(3) of the GEM Listing Rules. Accordingly, the New Leases will constitute
non-exempt continuing connected transactions of the Company under the GEM Listing Rules and are
subject to the approval of the Independent Shareholders and other reporting requirements under Rules
20.34 to 20.36 of the GEM Listing Rules.
Condition precedent
The New Leases are conditional upon the passing by the Independent Shareholders of ordinary
resolutions to approve the New Leases, which include the termination of the Existing Leases and the
Continuing Connected Transactions under the respective terms of the New Leases and the New Annual
Caps. Approval of the Independent Shareholders will be sought on the basis that the Company will
comply with the annual review and reporting requirements set out under Rules 20.27 to 20.30 and Rule
20.34 of the GEM Listing Rules. The termination of the Existing Leases also constitutes connected
transactions of the Company under the GEM Listing Rules.
LETTER FROM THE CHAIRMAN
— 7 —
R.20.47(3)(a)R.20.47(3)(c)
R.20.47(9)
Annual review of the Continuing Connected Transactions
Independent Shareholders’ approval for the Continuing Connected Transactions under the NewLeases will be sought on the basis that:
(a) the aggregate consideration for each of the two years ending 31 December 2004 in respectof:
(i) the New Circle K (HK) Lease shall not exceed HK$2,000,000 and HK$840,000respectively; and
(ii) the New Web-Logistic Lease shall not exceed HK$1,200,000 and HK$500,000
respectively;
(collectively the “New Annual Caps”);
(b) details of the Continuing Connected Transactions will be disclosed in the Company’s
annual report as described in Rules 20.34(1) to (5) of the GEM Listing Rules;
(c) the independent non-executive Directors shall review the Continuing Connected
Transactions and confirm in the Company’s next annual report and accounts that the
relevant Continuing Connected Transactions have been entered into:
(i) in the ordinary and usual course of business of the Group;
(ii) either on normal commercial terms or, if there are no sufficient comparable
transactions to judge whether they are on normal commercial terms, on terms no less
favourable to the Group than terms available to or from (as appropriate) independent
third parties; and
(iii) in accordance with the relevant agreements governing them on terms that are fair and
reasonable and in the interests of the Shareholders as a whole;
(d) each year the auditors of the Company shall provide a letter to the board of Directors (with
a copy to the Stock Exchange) confirming that each of the Continuing Connected
Transactions in the manner required under Rule 20.28 of the GEM Listing Rules. In
addition, the Company and LF (Management) have undertaken to the Stock Exchange to
allow the auditors sufficient access to their records for the purpose of reporting on the
transactions as set out in Rule 20.28 of the GEM Listing Rules;
(e) the Company shall notify the Stock Exchange if it knows or has reason to believe that the
independent non-executive Directors and/or the auditors will not be able to confirm the
matters set out in Rules 20.27 and/or 20.28 of the GEM Listing Rules respectively,
whereupon the Company may have to re-comply with Rules 20.26(3) and (4) of the GEM
Listing Rules and any other conditions the Stock Exchange considers appropriate; and
LETTER FROM THE CHAIRMAN
— 8 —
(f) in addition to complying with Rules 20.26 to 20.28, where the cap for the Continuing
Connected Transactions in any year is to be greater than the higher of HK$10,000,000 or
3% of the net tangible assets of the Company, which should not occur based on the size of
the New Annual Caps, the transactions and the caps are subject to review and re-approval
by independent shareholders at the annual general meeting following the initial approval
and at each subsequent annual general meeting so long as the transactions continue. The
independent non-executive Directors will be required to opine in the annual report whether
or not the Company should continue with the agreements for the transactions.
Reasons for the execution of the New Leases and benefits of the Continuing Connected
Transactions
The Company is engaged in the operation of one of the leading convenience store chains in Hong
Kong under the tradename of Circle K and a member of the Li & Fung Group. Bomaron is engaged
in property ownership and management in one of the operating arms within the Li & Fung Group. The
Group benefits from Bomaron’s property portfolio and has been using the Premises as office-cum-
workshop before the listing of the Company’s shares on GEM in 2001. The Group intends to continue
to use the Premises and to extend the respective terms under the Existing Leases when they expire on
31 July 2003.
As mentioned above, the total consideration payable by the Group under the Existing Leases for
their remaining terms after the Waiver expired on 31 December 2002 will add up to exceed the de
minimis threshold under Rule 20.25(3) of the GEM Listing Rules in or around mid June 2003.
Accordingly, the residue lease term of the Existing Leases will constitute non-exempt continuing
connected transactions under Rule 20.26 of the GEM Listing Rules, and will again be subject to the
reporting, announcement and shareholder’s approval under the GEM Listing Rules in or around mid
June 2003. In this respect, and on the basis that the rent under the New Leases will be the same as
in the Existing Leases, the Directors (including the independent non-executive Directors) consider
that the early termination of the Existing Leases before mid June 2003 and execution of the New
Leases for submission to the Independent Shareholders for early approval at the AGM will be in the
interests of the Group and its Shareholders, including the Independent Shareholders. The Directors
consider that the administration costs to be incurred for complying with the announcement and
shareholders’ approval requirements in respect of the Continuing Connected Transactions under Rules
20.35 and 20.36 of the GEM Listing Rules will be reduced if the Independent Shareholders’ approval
is sought earlier instead of at a later stage at a separately convened general meeting when the total
consideration payable by the Group under the Existing Leases for their remaining terms after the
Waiver expired on 31 December 2002 will exceed the de minimis threshold under Rule 20.25(3) of the
GEM Listing Rules in or around mid June 2003.
Ordinary resolutions will be proposed to approve the New Leases, which include the early
termination of the Existing Leases and the Continuing Connected Transactions under the respective
terms of the New Leases and the New Annual Caps at the AGM.
LETTER FROM THE CHAIRMAN
— 9 —
R.20.46(1)
Confirmation from the Directors
The Continuing Connected Transactions will be conducted in the normal course of business of
the Group and in accordance with the terms of the relevant agreements, which were negotiated on an
arm’s length basis. The rentals payable under the New Leases are determined based on terms that are
fair and reasonable by reference to the current rent payable under the Existing Leases for their
remaining terms until 31 July 2003 and the prevailing market rent of similar units at LiFung Centre.
The Directors, including the independent non-executive Directors, are of the view that the New Leases
were entered into on normal commercial terms and are fair and reasonable to the Company and the
Shareholders taken as a whole.
THE GENERAL MANDATES
At the annual general meeting of the Company held on 24 April 2002, general and unconditional
mandates were given to the Directors of the Company to:
(a) allot, issue and deal with Shares not exceeding 20% of the aggregate nominal value of the
share capital of the Company in issue as at 24 April 2002;
(b) repurchase Shares not exceeding 10% of the aggregate nominal value of the Shares in issue
as at 24 April 2002; and
(c) add to the general mandate to the Directors to allot, issue and deal with additional Shares
set out in (a) above the number of Shares repurchased by the Company pursuant to the
repurchase mandate set out in (b) above.
These general mandates will expire at the conclusion of the AGM to be held on 28 April 2003.
Approval is being sought from the Shareholders to grant a general mandate (the “General
Mandate”) to the Directors to exercise the powers of the Company to allot, issue, and deal with Shares
not exceeding 20% of the issued share capital of the Company as at the date of passing of the relevant
resolution to be proposed at the AGM and adding to the General Mandates the number of Shares
repurchased by the Company pursuant to the Repurchase Mandate (as defined below).
In addition, an ordinary resolution will be proposed at the AGM to approve the grant of a general
mandate to the Directors to exercise the powers of the Company to repurchase Shares up to a
maximum of 10% of the aggregate nominal amount of the Share capital of the Company in issue as
at the date of the passing of the relevant resolution (the “Repurchase Mandate”).
LETTER FROM THE CHAIRMAN
— 10 —
R.20.46(3)(c)
EXPLANATORY STATEMENT
An explanatory statement containing all relevant information relating to the Repurchase Mandate
and pursuant to the GEM Listing Rules, in particular Rule 13.08, is set out in the Schedule to this
letter. The information in the explanatory statement is to provide you with the information reasonably
necessary to enable you to make an informed decision on whether to vote for or against the resolution
relating to the Repurchase Mandate.
THE ANNUAL GENERAL MEETING
The following are details of the AGM:
Date : 28 April 2003
Time : 4:00 p.m.
Venue : Auditorium, 12th Floor, LiFung Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New
Territories, Hong Kong
The notice convening the AGM is set out on pages 41 to 46 of this circular. Resolutions 4 to 6
relate to the General Mandates and the Repurchase Mandate and resolutions 9 to 10 relate to the New
Leases, the Continuing Connected Transactions and the New Annual Caps. These resolutions will be
proposed as ordinary resolutions at the AGM for your consideration and approval.
LFR is the substantial and a management Shareholder of the Company and each of Bomaron and
LF (Management) is an indirect subsidiary of LF (1937) which is the holding company of LFR. By
virtue of these interests, LFR is considered to have an interest in the Existing Leases and New Leases.
Mr. Lau Butt Farn, a Shareholder and a Director, holds options in respect of 65,000 voting shares
in LF (Distribution). Mr. Lau is also a director of Bomaron. By virtue of these interests, Mr. Lau Butt
Farn is also considered to have an interest in the Existing Leases and the New Leases.
In view of the interests as mentioned above, LFR, Mr. Lau Butt Farn and their respective
associates will abstain from voting at the AGM in respect of the resolutions relating to the Existing
Leases and New Leases.
Dr. Fung Kwok King, Victor, a Director, is interested in options in respect of 290,000 voting
shares of LF (Distribution) and a trust established for his family interest is interested in 1,184,210
voting shares in Li & Fung (Gemini) Limited otherwise than by virtue of their interest in LF (1937).
Li & Fung (Gemini) is also a subsidiary of LF (1937) and a holding company of LF (Distribution) and
Bomaron. Dr. Fung is not a Shareholder.
A form of proxy for the AGM is enclosed with this circular. Whether or not you intend to be
present at the AGM, you are requested to complete the form of proxy and return it to the branch share
registrar of the Company, Abacus Share Registrars Limited, at Ground Floor, Bank of East Asia
Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong in accordance with the instructions
printed thereon not less than 48 hours before the time fixed for the AGM. The completion of a form
of proxy will not preclude you from attending and voting at the meeting in person.
LETTER FROM THE CHAIRMAN
— 11 —
R.20.47(3)(d)R.20.47(3)(f)
R.20.47(5)
RECOMMENDATIONS
(a) Continuing Connected Transactions
The Independent Board Committee comprising all the independent non-executive Directors has
been formed to consider the Continuing Connected Transactions and to advise the Independent
Shareholders in this regard. Watterson Asia has been appointed by the Company to advise the
Independent Board Committee in this regard.
The Independent Board Committee, having taken into account the advice of Watterson Asia, is
of the opinion that the terms of the New Leases, which include the early termination of the Existing
Leases and the Continuing Connected Transactions under the respective terms of the New Leases and
the New Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned
and in the interests of the Shareholders taken as a whole and accordingly recommends the Independent
Shareholders to vote in favour of the ordinary resolutions regarding the Continuing Connected
Transactions to be proposed at the AGM.
(b) General Mandate and Repurchase Mandate
The Directors are of the opinion that the General Mandates and the Repurchase Mandate referred
to in this circular are in the best interests of the Company and the Shareholders and recommend you
to vote in favour of the resolutions relating to the General Mandates and the Repurchase Mandate to
be proposed at the AGM.
GENERAL
The letter from Watterson Asia containing its advice and recommendation to the Independent
Board Committee is set out on pages 19 to 22 of this circular. The letter of advice from the
Independent Board Committee containing its recommendation is set out on page 18 of this circular.
Your attention is drawn to the letter from the Independent Board Committee, the letter of advice
from Watterson Asia, and the information set out in the appendix of this circular.
On behalf of the Board
Fung Kwok King, VictorChairman
LETTER FROM THE CHAIRMAN
— 12 —
R.20.46(3)(c)R.20.46(3)(d)R.20.47(7)
This is an explanatory statement given to all Shareholders relating to a resolution to be proposed
at the AGM authorizing the Repurchase Mandate.
This explanatory statement contains all the information required pursuant to Rule 13.08 and
other relevant provisions of the GEM Listing Rules which is set out as follows:
1. REGULATIONS OF THE GEM LISTING RULES
(a) Shareholders’ approval
All repurchase of securities on the GEM by a company with its primary listing on the GEM
must be approved in advance by an ordinary resolution, either by way of general mandate or by
specific approval in relation to specific transactions.
(b) Source of funds
Any repurchase must be financed out of funds legally available for the purpose in
accordance with the Company’s constitutive documents and the laws of the jurisdiction in which
the Company is incorporated or otherwise established.
(c) Trading restrictions
The shares to be repurchased by a company must be fully paid up. A company is authorized
to repurchase on the GEM or on any other stock exchange recognized for this purpose by the
Securities and Futures Commission in Hong Kong and the Stock Exchange the total number of
shares which represents up to a maximum of 10% of the existing issued share capital of that
company and warrants to subscribe for or purchase shares in the company representing up to 10%
of the amount of warrants outstanding at the date of the passing of the relevant resolution
granting the repurchase mandate. A company may not issue or announce a proposed issue of new
securities of the type that has been repurchased for a period of 30 days immediately following
a repurchase of securities whether on the GEM or otherwise (except pursuant to an exercise of
warrants, share options or similar instruments requiring the company to issue securities which
were outstanding prior to such repurchase) without the prior approval of the Stock Exchange. A
company is also prohibited from making securities repurchases on the GEM if the result of the
repurchase would be that the number of that company’s listed securities which are in the hands
of the public would fall below the relevant prescribed minimum percentage for that company as
determined by the Stock Exchange. A company may only purchase shares on the GEM if (1) the
purchase price is not higher than the latest (or current) independent bid price or the last
independent sale (contract) price quoted or reported on the system (as defined in the Rules of the
Stock Exchange), whichever is higher; and (2) the company has not made the opening bid nor
any bid in the last 30 minutes before the close of normal trading hours as stipulated in the Rules
of the Stock Exchange.
SCHEDULE TO LETTER FROM CHAIRMAN
— 13 —
(d) Status of repurchased securities
The listing of all repurchased securities (whether on the GEM or otherwise) is
automatically cancelled and the relative certificates must be cancelled and destroyed. Under
Cayman Islands law, a company’s repurchased shares shall be treated as cancelled and the
amount of the company’s issued share capital shall be reduced by the aggregate nominal value
of the repurchased shares accordingly although the authorized share capital of the company will
not be reduced.
(e) Suspension of repurchase
A company shall not purchase its own securities after a price-sensitive development has
occurred or has been the subject of a decision until the price-sensitive information is made
publicly available. In particular, during the period of one month immediately preceding either the
preliminary announcement of a company’s annual results or the publication of the company’s
half-yearly report or quarterly report, the company may not purchase its securities on the GEM
unless the circumstances are exceptional. In addition, the Stock Exchange may prohibit
repurchases of securities on the GEM if a company has breached the GEM Listing Rules.
(f) Reporting requirements
Repurchases of securities on the GEM or otherwise must be reported to the Stock Exchange
not later than 30 minutes before the earlier of the commencement of the morning trading session
or any pre-opening session on the business day following any day on which a company makes
a repurchase of shares. In addition, a company’s annual report and accounts are required to
include a monthly breakdown of securities repurchases made during the financial year under
review, showing the number of securities repurchased each month (whether on the GEM or
otherwise), the purchase price per share or the highest and lowest prices paid for all such
repurchases and the total price paid. The directors’ report is also required to contain reference
to the purchases made during the year and the directors’ reasons for making such purchases. The
company shall make arrangements with its broker who effects any such purchase to provide to
the company in a timely fashion the necessary information in relation to the purchase made on
behalf of the company to enable the company to report to the Stock Exchange. A company shall
procure that any broker appointed by it to effect the purchase of securities shall disclose to the
Stock Exchange such information with respect to purchases made on behalf of the company as
the Stock Exchange may request.
(g) Connected persons
Under the GEM Listing Rules, a company shall not knowingly purchase shares from a
connected person (as defined under the GEM Listing Rules) and a connected person shall not
knowingly sell his shares to the company. As at the “Latest Practicable Date” and to the best of
the knowledge of the Directors having made all reasonable enquiries, none of the Directors or
their respective associates (as defined in the GEM Listing Rules) has a present intention or has
undertaken not, in the event that the Repurchase Mandate is approved by the shareholders, to sell
Shares to the Company.
SCHEDULE TO LETTER FROM CHAIRMAN
— 14 —
2. EXERCISE OF THE REPURCHASE MANDATE
Exercise in full of the Repurchase Mandate, on the basis of 667,890,000 shares in issue as at the
Latest Practicable Date, could result in up to 66,789,000 shares being repurchased by the Company
during the period from the passing of Resolution No. 5 as set out in the notice of the AGM up to (i)
the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period
within which the next annual general meeting of the Company is required by the articles of association
of the Company or any applicable laws to be held; or (iii) the revocation, variation or renewal of the
Repurchase Mandate by ordinary resolution of the Shareholders in general meeting, whichever occurs
first.
3. REASONS FOR REPURCHASES
Repurchases of shares will only be made when the Directors believe that such a repurchase will
benefit the Company and the Shareholders. Such repurchases may, depending on market conditions
and funding arrangements at the time, lead to an enhancement of the net asset value of the Company
and/or its earnings per share.
4. FUNDING OF REPURCHASES
In repurchasing Shares, the Company may only apply funds legally available for such purpose
in accordance with its memorandum and articles of association and the applicable laws of the Cayman
Islands. The Company may not purchase its own securities on the GEM for a consideration other than
cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from
time to time.
5. GENERAL
There might be a material adverse impact on the working capital or gearing position of the
Company (as compared with the position disclosed in the audited financial statements contained in the
2002 annual report of the Company) in the event that the Repurchase Mandate is exercised in full.
However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would,
in the circumstances, have a material adverse effect on the working capital requirements of the
Company or on the gearing levels which in the opinion of the Directors are from time to time
appropriate for the Company.
6. UNDERTAKING
The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable,
they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, the
memorandum and articles of association of the Company and the applicable laws of the Cayman
Islands.
SCHEDULE TO LETTER FROM CHAIRMAN
— 15 —
7. THE HONG KONG CODE ON TAKEOVERS AND MERGERS
If, as a result of a repurchase of shares, a shareholder’s proportionate interest in the voting rights
of the Company increases, such increase will be treated as an acquisition for the purposes of the Hong
Kong Code on Takeovers and Mergers (the “Code”). As a result, a shareholder, or a group of
shareholders acting in concert (within that term’s meaning under the Code), depending on the level
of increase in the shareholder’s interests, could obtain or consolidate control of the Company and
become obliged to make a mandatory offer in accordance with Rule 26 of the Code.
As at the Latest Practicable Date, LFR, which is a substantial shareholder and an initial
management shareholder of the Company, and the other initial management shareholders of the
Company together held approximately 55.95% of the Shares issued by the Company. In the event that
the Directors exercised in full the power to repurchase Shares in accordance with the terms of the
ordinary resolution to be proposed at the AGM, the total interests of LFR and the initial management
shareholders of the Company in the Shares would be increased to approximately 62.16% of the issued
Shares and they would not be obliged to make a mandatory offer under Rule 26 of the Takeovers Code
in this respect.
8. SHARE PURCHASE MADE BY THE COMPANY
No purchases of Shares have been made by the Company since the granting of the Repurchase
Mandate on 24 April 2002, whether on the Stock Exchange or otherwise.
9. CONNECTED PERSON
No connected person (as defined in the GEM Listing Rules) has notified the Company that it has
a present intention to sell Shares to the Company, or has undertaken not to do so, in the event that the
Repurchase Mandate is approved by the Shareholders.
SCHEDULE TO LETTER FROM CHAIRMAN
— 16 —
10. SHARE PRICES
The highest and lowest prices at which the Shares were traded on the GEM during each of the
previous twelve months preceding the Latest Practicable Date were as follows:
Shares
Highest Lowest
HK$ HK$
2002
March 2.750 2.425
April 2.550 2.150
May 3.025 2.325
June 2.925 2.850
July 2.900 2.400
August 2.600 2.250
September 2.350 2.000
October 2.175 1.900
November 2.300 2.000
December 2.275 2.000
2003
January 2.150 1.980
February 2.050 1.870
SCHEDULE TO LETTER FROM CHAIRMAN
— 17 —
CONVENIENCE RETAIL ASIA LIMITED
(Incorporated in the Cayman Islands with limited liability)
31 March 2003
To the Independent Shareholders
Dear Sir or Madam,
We refer to the circular of the Company desptached to the Shareholders dated 31 March 2003 (the
“Circular”), of which this letter forms a part. The terms defined in the Circular shall have the same
meanings as defined in this letter unless the context otherwise requires.
We have been appointed as the Independent Board Committee to advise you in connection with
the New Leases, the Continuing Connected Transactions and the New Annual Caps, details of which
are set out in the “Letter from the Chairman” contained in the Circular.
Watterson Asia has been appointed as the independent financial adviser to advise us regarding
the terms of the New Leases, which include the early termination of the Existing Leases and the
Continuing Connected Transactions under the respective terms of the New Leases and the New Annual
Caps. Details of their advice, together with the principal factors and reasons taken into consideration
in arriving at such advice, are set out in their letter on pages 19 to 22 of the Circular.
Having taken into account the terms of the New Leases, the interests of the Independent
Shareholders and the advice of Watterson Asia, we consider the New Leases, which include the early
termination of the Existing Leases and the Continuing Connected Transactions under the respective
terms of the New Leases and the respective New Annual Caps are fair and reasonable so far as the
Independent Shareholders are concerned and in the interests of the Shareholders taken as a whole.
Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary
resolutions approving the Continuing Connected Transactions and the respective New Annual Caps.
Your attention is drawn to the “Letter from the Chairman” and the “Letter from Watterson Asia”
set out in the Circular.
Yours faithfully,
For and on behalf of theIndependent Board Committee
Au Man Chung, MalcolmIndependent non-executive Director
Dr. Ch’ien Kuo Fung, RaymondIndependent non-executive Director
Godfrey Ernest ScotchbrookIndependent non-executive Director
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
— 18 —
R. 20.46(3)(c)R. 20.46(3)(d)R. 20.47.(7)
Watterson Asia Limited 5th Floor, 8 Queen’s Road Central, Hong Kong
Tel: (852) 2525 1990
Fax: (852) 2526 1990
31 March 2003
The Independent Board Committee
Convenience Retail Asia Limited
12th Floor, LiFung Centre
2 On Ping Street
Siu Lek Yuen
Shatin
New Territories
Hong Kong
Dear Sirs,
Continuing Connected Transactions
We refer to our engagement as the independent financial adviser to the Company in respect of
the Continuing Connected Transactions under the New Circle K (HK) Lease and the New Web-Logistic
Lease as described in the “Letter from the Chairman” set out in the circular of the Company dated 31
March 2003 to Shareholders (the “Circular”) of which this letter forms part. Unless the context
requires otherwise, capitalised terms used in this letter shall have the same meanings as defined in the
Circular.
We have been appointed by the Company to advise the Independent Board Committee on the
terms of the New Leases and to give our opinion as to whether the terms of such leases and their
respective New Annual Caps are fair and reasonable so far as the Independent Shareholders are
concerned. Details and reasons for the New Leases have been set out in the “Letter from the
Chairman” in the Circular.
In forming our recommendation, we have relied on the accuracy of the information and
representations contained in the Circular, which have been provided by the Directors and have
assumed all information and representations made or referred to in the Circular were true at the date
of the Circular. We have been advised by the Directors that no material facts have been omitted from
the information provided and referred to in the Circular. We have also relied on the representation in
writing by CB Richard Ellis Limited, an independent property valuer, on the current market rent of
the Premises. We consider that we have reviewed sufficient information to reach an informed view and
to justify reliance on the accuracy of the information contained in the Circular and to provide a
reasonable basis for our recommendation. We have not, however, for the purpose of this exercise
conducted any independent investigation into the business and affairs or the future prospects of the
Group.
LETTER FROM WATTERSON ASIA
— 19 —
R. 20.46(4)R. 20.47(8)
PRINCIPAL FACTORS AND REASONS CONSIDERED
In arriving at our opinion on the New Leases and their respective New Annual Caps, we have
taken into consideration the following factors and reasons:
Background to the New Leases
In June 2000, Circle K (HK) and Web-Logistic (HK) each entered into the Existing Circle K (HK)
Lease and the Existing Web-Logistic Lease with Bomaron. Monthly rent (exclusive of management fee
and government rates) payable under the Existing Circle K (HK) Lease and the Existing Web-Logistic
Lease is HK$82,892.00 and HK$50,668.00 respectively. Both leases are in respect of floor spaces on
5th Floor, LiFung Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong and
are due to expire on 31 July 2003. As Bomaron is a connected person under the GEM Listing Rules,
the Company had applied for and obtained the Waiver from the Stock Exchange from strict compliance
with the requirements under the GEM Listing Rules in January 2001. The Waiver expired on 31
December 2002 but the Existing Leases will only expire on 31 July 2003.
Pursuant to an internal restructuring of property leasing and management activities of Bomaron,
Bomaron has entered into two new head leases with LF (Management), a connected person under the
GEM Listing Rules, whereby the Premises will be leased to LF (Management) when the New Leases
take effect on 1 May 2003. Incidental to such internal restructuring of property leasing activities, and
to secure the continual use of the Premises, each of Circle K (HK) and Web-Logistic (HK) has entered
into the New Circle K (HK) Lease and the New Web-Logistic Lease with Bomaron and LF
(Management) in respect of the Premises for the same rent under the Existing Leases for a revised term
from 1 May 2003 to 31 May 2004. Pursuant to the New Leases, the parties have agreed to early
terminate the Existing Leases before their expirations on 31 July 2003.
Given the above background and for the purpose of securing the continual usage of the Premises,
we are of the view that the entering of the New Leases and the termination of the Existing Leases are
reasonable.
Terms of the New Leases
Under the New Circle K (HK) Lease, monthly rental and management fee payable by Circle K
(HK) are HK$82,892.00 and HK$29,012.20 respectively whereas government rates are expected to be
HK$13,629.24 per quarter. On per square foot basis, monthly rental and management fee payable by
Circle K (HK) will be HK$4.0 and HK$1.4 respectively, the same as those currently payable under the
Existing Circle K (HK) Lease. Based on the above terms, the amount expected to be paid by Circle
K (HK) is HK$116,447 per month or a total of approximately HK$1.51 million under the term of the
New Circle K (HK) Lease.
LETTER FROM WATTERSON ASIA
— 20 —
Under the New Web-Logistic Lease, monthly rental and management fee payable by Web-
Logistic (HK) are HK$50,668.00 and HK$17,733.80 respectively whereas government rates are
expected to be HK$8,330.92 per quarter. Again, on per square foot basis, monthly rental and
management fee payable by Web-Logistic (HK) will be HK$4.0 and HK$1.4 respectively, the same as
those currently payable under the Existing Web-Logistic Lease. Based on the above terms, the amount
expected to be paid by Web-Logistic (HK) is HK$71,178 per month or a total of approximately
HK$0.93 million under the term of the New Web-Logistic Lease.
We have discussed the New Leases with CB Richard Ellis Limited, an independent property
valuer, and that they have provided us in writing that the terms of the New Leases are of market rent.
Based on the representation from CB Richard Ellis Limited that the terms of the New Leases are
market rents, we are of the opinion that the New Leases are entered into in the ordinary course of
business of Circle K (HK) and Web-Logistic (HK) respectively under normal commercial terms and
are fair and reasonable so far as the Independent Shareholders are concerned.
The New Annual Caps
The new annual caps in respect of the New Circle K (HK) Lease for the four months to 30 April
2003 under the Existing Circle K (HK) Lease and the first eight months to 31 December 2003 under
the New Circle K (HK) Lease have been set at not more than HK$2,000,000; and that for the five
months to 31 May 2004 under the New Circle K (HK) Lease of not more than HK$840,000. Based on
current monthly rental arrangement, Circle K (HK) is expected to pay a total of approximately
HK$1.39 million for the year ending 31 December 2003, and a total of approximately HK$0.58 million
for the five months to 31 May 2004. We noted that the new annual caps for the above periods are
higher than that of the expected rental payment by Circle K (HK) but are the same as the existing ones
under the Existing Circle K (HK) Lease. We understand from the Company that the buffers under the
new annual caps are mainly to cater for possible future increase in management fee and/or government
rates during the term of the New Circle K (HK) Lease. Consequently, we are of the view that the new
annual caps are fair and reasonable so far as the Independent Shareholders are concerned.
The new annual caps in respect of the New Web-Logistic Lease for the four months to 30 April
2003 under the Existing Web-Logistic Lease and the first eight months to 31 December 2003 under
the New Web-Logistic Lease has been set at not more than HK$1,200,000; and that for the five months
to 31 May 2004 under the New Web-Logistic Lease of not more than HK$500,000. Based on current
monthly rental arrangement, Web-Logistic (HK) is expected to pay a total of approximately HK$0.85
million for the year ending 31 December 2003, and a total of approximately HK$0.36 million for the
five months to 31 May 2004. We noted that the new annual caps for the above periods are higher than
that of the expected rental payment by Web-Logistic (HK) but are the same as the existing ones under
the Existing Web-Logistic Lease. We also understand from the Company that the buffers under the new
annual caps are mainly to cater for possible future increase in management fee and/or government
rates during the term of the New Web-Logistic Lease. Consequently, we are of the view that the new
annual caps are fair and reasonable so far as the Independent Shareholders are concerned.
LETTER FROM WATTERSON ASIA
— 21 —
We understand that the granting of the above New Annual Caps is on the condition that, amongst
others, independent non-executive Directors reviewing the Continuing Connected Transactions and
confirming in the Company’s annual report and accounts that the relevant payments by Circle K (HK)
and Web-Logistic (HK) have been made in accordance with the terms under the New Circle K (HK)
Lease and the New Web-Logistic Lease. As the above payments by Circle K (HK) and Web-Logistic
(HK) will be made in accordance with the terms of the New Leases, which are based on current market
rents as confirmed by CB Richard Ellis Limited in writing, we are of the view that the New Annual
Caps are fair and reasonable so far as the Independent Shareholders are concerned.
We also noted that in the unlikely event that the cap for the Continuing Connected Transactions
in any year is to be greater than the higher of HK$10 million or 3% of the net tangible assets of the
Company, the Continuing Connected Transactions and the respective cap amounts will be subject to
review and re-approval by Independent Shareholders at subsequent annual general meeting.
Consequently, we are of the opinion that the above arrangement has provided Independent
Shareholders the necessary protection in respect of the Continuing Connected Transactions in the
future.
RECOMMENDATION
Having considered the above principal factors and reasons, we are of the view that the New
Leases were entered into in the ordinary and usual course of business under normal commercial terms
and are in the interests of the Company. In addition, we are of the opinion that the terms of the New
Leases and their respective New Annual Caps are fair and reasonable so far as the Independent
Shareholders are concerned. Consequently, we would advise the Independent Board Committee to
recommend to the Independent Shareholders to vote in favor of the ordinary resolution to approve the
Continuing Connected Transactions to be proposed at the upcoming AGM.
Yours faithfully,
For and on behalf of
Watterson Asia LimitedDavid Tsang
Managing Director
LETTER FROM WATTERSON ASIA
— 22 —
1. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full responsibility,
includes particulars given in compliance with the GEM Listing Rules for the purpose of giving
information with regard to the Company. The Directors, having made all reasonable enquiries, confirm
that, to the best of their knowledge and belief:
(a) the information contained in this circular is accurate and complete in all material respects
and not misleading;
(b) there are no other matters the omission of which would make any statement in this circular
misleading; and
(c) all opinions expressed in this circular have been arrived at after due and careful
consideration and are founded on bases and assumptions that are fair and reasonable.
2. DISCLOSURE OF INTERESTS
As at the Latest Practicable Date, the interests of each of the Directors, chief executives and their
associates in the equity or debt securities of the Company and its associated corporations (within the
meaning of the Securities (Disclosure of Interests) Ordinance (“SDI Ordinance”)) which were notified
to the Company and the Stock Exchange pursuant to Section 28 of the SDI Ordinance (including
interests which they were taken or deemed to have under Section 31 of, or Part 1 of the Schedule to,
the SDI Ordinance), or which were required, pursuant to Section 29 of the SDI Ordinance, to be
entered in the register referred to therein, or which were required, pursuant to Rules 5.40 to 5.59 of
the GEM Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:
(a) Interests in the Company and certain major associated corporations
Name of theCompany
Name ofDirector
PersonalInterests
FamilyInterests
CorporateInterests
OtherInterests Total
Company Dr. Fung KwokKing, Victor
— — 373,692,000(Note 1)
— 373,692,000
Company Dr. Fung KwokLun, William
— — 373,692,000(Note 1)
— 373,692,000
Company Yeung Lap Bun,Richard
17,896,000 — — — 19,196,000
1,300,000(Note 2)
Company Li Kwok Ho,Bruno
2,676,000 — — — 2,926,000
250,000(Note 3)
Company Lau Butt Farn 2,676,000 — — — 2,676,000
APPENDIX GENERAL INFORMATION
— 23 —
App. 1B(2)
R. 11.04App. 1B(38)(1) and (2)
Name of theCompany
Name ofDirector
PersonalInterests
FamilyInterests
CorporateInterests
OtherInterests Total
Company Wong Yuk Nor,Louisa
1,338,000 — — — 1,588,000
250,000(Note 4)
Company Dr. Ch’ien KuoFung, Raymond
1,000,000 — — — 1,000,000
Li & Fung(Gemini)Limited
Dr. Fung KwokKing, Victor
— — 10,263,158(Note 5)
1,184,210(Note 7)
11,447,368
Li & Fung(Gemini)Limited
Dr. Fung KwokLun, William
— — 10,263,158(Note 5)
— 10,263,158
Li & Fung(Distribution)Limited
Dr. Fung KwokKing, Victor
(i)130,000(Note 8)
— (i)6,800,000
(full votingordinary shares)
(Note 6)
— 7,090,000(full voting
ordinary shares)
(ii)160,000(Note 9)
(ii)6,630,000
(redeemableparticipating
preferred shares)(Note 6)
6,630,000(redeemableparticipating
preferred shares)
Li & Fung(Distribution)Limited
Dr. Fung KwokLun, William
— — (i)6,800,000
(full votingordinary shares)
(Note 6)
— 6,800,000(full voting
ordinary shares)
(ii)6,630,000
(redeemableparticipating
preferred shares)(Note 6)
6,630,000(redeemableparticipating
preferred shares)
Li & Fung(Distribution)Limited
Lau Butt Farn 32,500(Note 8)
— — — 65,000
32,500(Note 10)
Li & FungLimited
Dr. Fung KwokKing, Victor
— — 1,180,500,000(Note 11)
50,750,000(Note 12)
1,231,250,000
Li & FungLimited
Dr. Fung KwokLun, William
68,502,300 4,000(Note 13)
1,180,500,000(Note 11)
— 1,250,446,300
480,000(Note 14)
480,000(Note 15)
480,000(Note 16)
Li & FungLimited
Lau Butt Farn 2,200,000 — — — 2,200,000
APPENDIX GENERAL INFORMATION
— 24 —
Notes:
1. King Lun Holdings Limited (“King Lun”) through its indirect wholly owned subsidiary, Li & Fung
(Retailing) Limited (“LFR”) (a wholly owned subsidiary of Li & Fung (1937) Limited (“LF (1937)”) held
373,692,000 Shares in the Company. 1,332,840 shares in King Lun, representing 50% of its issued share
capital, are owned by J.P. Morgan Trust Company (Jersey) Limited, the trustee of a trust established for the
benefit of the family members of Dr. Fung Kwok King, Victor. The remaining 50% of King Lun is owned
by Dr. Fung Kwok Lun, William.
2. In May 2002, Mr. Yeung Lap Bun, Richard was granted share options to subscribe for 1,300,000 Shares.
The options are exercisable at a subscription price of HK$2.785 per Share during the period from 24 May
2003 to 23 May 2007.
3. In May 2002, Mr. Li Kwok Ho, Bruno was granted share options to subscribe for 250,000 Shares. The
options are exercisable at a subscription price of HK$2.785 per Share during the period from 24 May 2003
to 23 May 2007.
4. In May 2002, Ms. Wong Yuk Nor, Louisa was granted share options to subscribe for 250,000 Shares. The
options are exercisable at a subscription price of HK$2.785 per Share during the period from 24 May 2003
to 23 May 2007.
5. King Lun through its wholly owned subsidiary, LF (1937) held 10,263,158 shares in Li & Fung (Gemini)
Limited (“LFG”). Dr. Fung Kwok King, Victor and Dr. Fung Kwok Lun, William are deemed to have
interests in these shares through their respective interests in King Lun and LF (1937) as set out in note (1)
above.
6. LFG holds 6,800,000 full voting ordinary shares and 6,630,000 redeemable participating preferred shares
in Li & Fung (Distribution) Limited (“LFD”). Dr Fung Kwok King, Victor and Dr. Fung Kwok Lun, William
are deemed to have interests in these shares through their respective interests in King Lun and LF (1937)
and indirect interests in LFG as set out in notes (1) & (5) above.
7. 1,184,210 shares in LFG are owned by a company which is held by J.P. Morgan Trust Company (Jersey)
Limited.
8. In 1999, Dr. Fung Kwok King, Victor and Mr. Lau Butt Farn were granted share options to subscribe for
130,000 and 32,500 full voting ordinary shares of US$0.01 each in LFD (“LFD Shares”) respectively. Of
these, options in respect of 105,500 and 26,000 LFD Shares are fully vested in Dr. Fung Kwok King, Victor
and Mr. Lau Butt Farn respectively. The remaining share options are to be vested in Dr. Fung Kwok King,
Victor and Mr. Lau Butt Farn on 31 December 2003. The share options are exercisable at US$1 per LFD
Share within 21 business days after the earliest of (a) the date of issuance of a notice for an initial public
offering of LFD Shares, (b) the date of issuance of a notice of the sale of all or substantially all of the
business or shares of LFD and (c) 31 December 2006.
9. In 1999, Dr. Fung Kwok King, Victor was granted share options to subscribe for 16,000 LFD Shares for
each full percentage point by which certain LFD investors’ fully diluted aggregate estimated internal rate
of return on a public share offer by LFD, or on a sale of all or substantially all of its business or shares,
exceeds 30% per annum, subject to a maximum of 160,000 LFD Shares. The share options are exercisable
at US$1 per LFD Share within 21 business days after the date of issuance of a notice of public offer or sale
(whichever is earlier) as described in note (8) above.
APPENDIX GENERAL INFORMATION
— 25 —
10. In 2002, Mr. Lau Butt Farn was granted share options to subscribe for 3,250 LFD Shares for each full
percentage point by which certain LFD investors’ fully diluted aggregate estimated internal rate of return
on a public share offer by LFD, or on a sale of all or substantially all of its business or shares, exceeds 30%
per annum, subject to a maximum of 32,500 LFD Shares. The share options are exercisable at US$1 per LFD
Share within 21 business days after the date of issuance of a notice of public offer or sale (whichever is
earlier) as described in note (8) above.
11. Out of the 1,180,500,000 shares of HK$0.025 each in Li & Fung Limited (“LF Shares”), holdings of
49,950,800 LF Shares, 996,000,000 LF Shares and 134,549,200 LF Shares are respectively held by King
Lun, LF (1937) and Orient Ocean Holdings Limited (“Orient Ocean”). Orient Ocean is a private company
incorporated in the British Virgin Islands. LF (1937) held 50% of the voting rights, but no beneficial
interests, in Orient Ocean. Dr. Fung Kwok King, Victor and Dr. Fung Kwok Lun, William are deemed to
have interests in these shares through their respective interests in King Lun and LF (1937) as set out in
notes (1) & (5) above.
12. 50,750,000 LF Shares are held by J.P. Morgan Trust Company (Jersey) Limited.
13. 4,000 LF Shares are owned by the wife of Dr. Fung Kwok Lun, William.
14. In 2000, Dr. Fung Kwok Lun, William was granted share options to subscribe for 480,000 LF Shares. The
options are exercisable at a subscription price of HK$15.26 per LF Shares during the period from 7 July
2001 to 6 July 2003.
15. In July 2001, Dr. Fung Kwok Lun, William was granted share options to subscribe for 480,000 LF Shares.
The options are exercisable at a subscription price of HK$10.50 per LF Shares during the period from 18
July 2002 to 17 July 2004.
16. In August 2001, Dr. Fung Kwok Lun, William was granted share options to subscribe for 480,000 LF
Shares. The options are exercisable at a subscription price of HK$7.98 per LF Shares during the period from
28 August 2003 to 27 August 2005.
(b) Dr. Fung Kwok King, Victor and Dr. Fung Kwok Lun, William, by virtue of their interests
in King Lun and LF (1937) as set out above, have the following indirect interests in the
other associated corporations of the Company:
Name of corporation
Class and/ordescriptionsof securities Balance
Active Islands Group Limited ordinary share 1
Albinina Limited ordinary shares 2
Allegreto Company Limited ordinary shares 2
American Discount Store Limited ordinary shares 100
Anglo-Thai Company Limited ordinary shares 6,859,980
Anglo-Thai Corporation Limited ordinary shares 20,887,323
Anglo-Thai Services Limited class A shares 160
class B shares 3,920
Anglo-Thai Tractors Limited ordinary shares 499,980
APPENDIX GENERAL INFORMATION
— 26 —
Name of corporation
Class and/ordescriptionsof securities Balance
Appleton Holdings Limited ordinary share 1
Asiadent Pte Limited ordinary shares 200,000
Auto Electric Limited ordinary shares 75,000
B.G.S. Limited ordinary shares 2,880
preference shares 7,120
Bacarolle Limited ordinary shares 2
Basic & More Fashion Limited ordinary shares 1,000,000
Black Cat Fireworks Limited ordinary shares 1,200,000
BLS (Thailand) Limited ordinary shares 490
preference shares 510
Blue Sky Buying Services Limited ordinary shares 2
Bomaron Limited ordinary shares 2
non-voting deferred shares 10,000
Borneo Agencies Limited ordinary shares 2,000
preference shares 2,000
Borneo Investments (Singapore) Pte Limited ordinary shares 4
Borneo Technical (Thailand) Limited ordinary shares 16,000
preference shares 2,010
Borneo Technical Co (M) Sdn Bhd ordinary shares 4,231,002
Borneo Technical Hong Kong Limited ordinary shares 1,000
Bosca Development Limited ordinary shares 2
Branded Lifestyle International Limited ordinary share 1
Branded Lifestyle Korea Ltd common stock 52,484
B-Trak Holdings (Malaysia) Sdn Bhd ordinary shares 40,000,000
Butler & Webster (Thailand) Limited ordinary shares 100,000
Camberley Enterprises Limited ordinary shares 250,000
Canathan Inc ordinary shares 8,750
Circle K - Amazens Retalhistas
(Macau) Limitada
quotas 2 (Note 1)
Circle K Convenience Stores
(Greater China) Limited
ordinary shares 10,000
Circle K Convenience Stores (HK) Limited ordinary shares 183,756
Circle K Convenience Stores Limited ordinary shares 10,000
Circle K Convenience Stores PRC
(BVI) Limited
ordinary shares 1
Circle K Convenience Stores PRC Limited ordinary shares 2
Circle K PRC Properties Limited ordinary share 2
Clear Lake Group Limited ordinary shares 2
Colby Group Holdings Limited ordinary shares 45,000
APPENDIX GENERAL INFORMATION
— 27 —
Name of corporation
Class and/ordescriptionsof securities Balance
Colby International (Guatemala),
Sociedad Anonima
shares 5,000
Colby International Limited ordinary shares 1,500,000
Colby Nominees Limited ordinary share 1
Colby Property Holdings Limited ordinary share 1
Colby Tekstil ve Dis Ticaret Limited Sirketi ordinary shares 100
Convenience Retail Asia (BVI) Limited ordinary shares 10,000
Convenience Retail Southern China Limited
*
capital contribution RMB39,000,000
Cornerstone Enterprises Limited ordinary shares 10,000
Costume Limited ordinary shares 2
CS Asia Limited ordinary share 1
CS International (Offshore) Limited ordinary share 1
CS International Limited ordinary shares 1,000,000
Cuore Limited ordinary shares 2
Dana International Limited ordinary shares 2
Dephina Limited ordinary shares 10,000
Dodwell (Korea) Limited ordinary shares 500
Dodwell (Mauritius) Limited ordinary A shares 300
Dodwell (Singapore) Pte Limited ordinary shares 200
Dodwell (Taiwan) Limited ordinary shares 1,150
Dodwell Limited ordinary shares 2
Dodwell Philippines, Inc. ordinary shares 150,000
Eclat Properties Inc. ordinary shares 100
E-Foremost Management Limited ordinary share 1
eLiFung.Com Limited ordinary shares 2
Ellinwood Limited (incorporated in B.V.I.) ordinary share 1
Ellinwood Limited (incorporated in Hong Kong) ordinary shares 2
Epiquest Limited ordinary shares 100
Eurosports Trading Limited ordinary shares 2
Exportacao Dodwell (Macau) Limitada quotas 8 (Note 2)
Factory Products Centre (Thailand) Limited ordinary shares 49,000
preference shares 51,000
Fashion Lifestyle (Singapore) Pte Ltd ordinary shares 2
Ferragamo Korea Limited ordinary shares 329,120
Ferrinch (L) Limited class A shares 1,500,000
class B shares 3,000,000
Forrestgrove Limited ordinary shares 2
G.S.C.M. (Marketing) Limited ordinary shares 50,000
APPENDIX GENERAL INFORMATION
— 28 —
Name of corporation
Class and/ordescriptionsof securities Balance
Gibb, Livingston & Company Limited ordinary shares 26,600
Gibb, Livingston International Limited ordinary shares 100,000
Gilman & Company Limited ordinary shares 100,000
Gilman Industrial Limited ordinary shares 610,050
non-voting deferred shares 175,000
Golden Gate Fireworks Inc. common stock 8,000
Golden Horn (III) L.P. (Partnership) contribution US$100
Golden Horn N.V. ordinary shares 61
Golden Horn Venture Capital Limited ordinary shares 40,000
Goodwest Enterprises Limited ordinary shares 2
GSCM (HK) Limited ordinary shares 1,400
Hillung Enterprises Limited ordinary shares 30,000
Holport II - Texteis e Decoracao, Limitada quotas 3 (Note 3)
Home Mart Limited ordinary shares 2
Homeworks (Europe) B.V. ordinary shares 180
Homeworks Limited ordinary shares 2
Hua Mark Patana Limited ordinary shares 1,000
IDS Logistics (Hong Kong) Limited ordinary shares 10,000
IDS Logistics (Philippines), Inc shares 100,000
IDS Logistics (Taiwan) Limited ordinary shares 2
IDS Logistics (Thailand) Limited ordinary shares 1,215,000
IDS Logistics Services (M) Sdh Bhd ordinary shares 2,000,000
IDS Logistics Services Pte Limited ordinary shares 28,296,962
IDS Logistics, Inc. ordinary shares 50,003
Imperial Glory Limited ordinary shares 2
Interfocus Holdings Limited ordinary share 1
International Sourcing Group Europe Limited ordinary shares 20
International Sourcing Group, LLC capital contribution US$200,000
iSCM Asia Limited ordinary shares 2
iSCM Asia Pte Limited ordinary shares 2
Janco Overseas (Thailand) Limited ordinary shares 245,000
preference shares 255,000
Janco Overseas Buying Agency Pte. Ltd ordinary shares 2
Janco Overseas Limited ordinary shares 760,000
JDH (China) Limited ordinary shares 400,000
JDH (Hong Kong) Limited ordinary shares 2,000,000
JDH (Nanjing) Development Company Limited
*
registered capital US$800,000
APPENDIX GENERAL INFORMATION
— 29 —
Name of corporation
Class and/ordescriptionsof securities Balance
JDH (Nanjing) Investment Enterprise Limited
*
registered capital US$3,000,000
JDH (Philippines), Inc. ordinary shares 500,000
JDH Borneo (Thailand) Limited ordinary shares 160,000
preference shares 55,000
JDH Borneo Sdn Bhd ordinary shares 2,100,000
JDH Dental Sdn Bhd ordinary shares 150,000
JDH Investments (S) Pte Limited ordinary shares 2,360
JDH Logic-Med Sdn Bhd ordinary shares 165,000
JDH Marketing (Singapore) Pte Limited ordinary shares 300,000
preference shares 60,000
JDH Marketing (Thailand) Limited ordinary shares 2,100,000
JDH Marketing Sdn Bhd ordinary shares 2,000,000
JDH Marketing Services Co., Limited
*
ordinary shares 6,000,000
JDH Pharmaceutical Sdn Bhd ordinary shares 400,000
JDH Services Limited ordinary shares 380,000
preference shares 400,000
JDH Toys Limited ordinary shares 7,400
Kijpinyo Company Limited ordinary shares 980
Kingfort Limited ordinary shares 2
Kingsbury International Limited ordinary shares 2
Kistor Limited class A shares 9,000
Kuching Hotels Sdn Bhd ordinary shares 34,799,303
Kwikpart (Thailand) Limited ordinary shares 24,500
preference shares 25,500
Kwikpart Holdings Limited ordinary share 1
Kwikpart Sdn Bhd ordinary shares 350,000
Kwikpart Singapore Pte Limited ordinary shares 278,600
Kwok Yue Limited ordinary shares 100
L&F Branded Lifestyle (Malaysia) Sdn Bhd ordinary share 1,300,000
L&F Branded Lifestyle (Singapore) Pte Limited ordinary shares 500,000
L&F Branded Lifestyle International Limited ordinary share 1
LF Capital (II) Limited class A shares 110
class B shares 115
LF Capital Management Limited ordinary share 1
LF Corporate Capital (I) Limited ordinary share 1
LF Distribution Centers Limited ordinary shares 2,500,000
LF DistriCenters Development Limited ordinary shares 2
APPENDIX GENERAL INFORMATION
— 30 —
Name of corporation
Class and/ordescriptionsof securities Balance
LF Europe Limited ordinary share 1
LF Europe Sourcing Limited ordinary shares 100
LF European Capital Limited ordinary share 1
LF Industrial Estates Limited class A shares 76,838,400
class B shares 11,500,000
LF International Inc. common stock 202
LF International Limited ordinary shares 50,000
LF Maclaine (Thailand) Limited ordinary shares 40,000
LFC Holdings Limited ordinary shares 2
LFCF Investment I (Europe) Limited ordinary share 1
LFCF Investment I (USA) Limited ordinary share 1
LFD (China) Limited ordinary shares 2,000
LFD (Singapore) Pte Limited ordinary shares 163,714,597
LFD (Thailand) Limited ordinary shares 655,000
LFD Corporate Services Sdn Bhd ordinary shares 14,231,002
LFD Holdings Sdn Bhd ordinary shares 33,000,000
LFD Investment Holdings Limited ordinary shares 44,150
LFD Manufacturing (Hong Kong) Limited
*
ordinary shares 2
LFD Manufacturing (Shanghai) Limited
*
registered capital US$5,000,000
LFD Manufacturing Limited
(incorporated in Hong Kong)
ordinary shares 3,000
LFD Manufacturing Limited
(incorporated in Thailand)
ordinary shares 4,695,000
LFD Manufacturing Sdn Bhd ordinary shares 3,000,000
LFD Properties Limited ordinary shares 2
LFD Technical Services Limited ordinary share 1
LFD-Online Sdn Bhd ordinary shares 2
LFIE Management (BVI) Ltd ordinary shares 1,000
LFIE Management Ltd ordinary shares 1,000
Li & Fung (B.V.I.) Limited ordinary shares 400,010
Li & Fung (Bangladesh) Limited ordinary shares 100
Li & Fung (Canada) Inc. common shares 100
Li & Fung (Dominicana) S.A. registered shares 200
Li & Fung (Europe) Holding Limited ordinary shares 100
Li & Fung (Exports) Limited ordinary shares 10
non-voting deferred shares 8,600
APPENDIX GENERAL INFORMATION
— 31 —
Name of corporation
Class and/ordescriptionsof securities Balance
Li & Fung (Fashion Accessories) Limited ordinary A shares 30,000
ordinary B shares 30,000
Li & Fung (Guatemala) S.A. common shares 5
Li & Fung (Honduras) Limited nominative common shares 250
Li & Fung (Hong Kong) Limited ordinary shares 5,500
Li & Fung (India) Private Limited equity shares 6,400,020
Li & Fung (Italia) S.r.l. units 90
Li & Fung (Korea) Limited common stock 40,000
Li & Fung (London) Limited ordinary shares 10,000
Li & Fung (Mauritius) Limited class A shares 750
Li & Fung (Philippines) Inc. ordinary shares 5,000
Li & Fung (Portugal) Limited ordinary shares 100
Li & Fung (Properties) Limited ordinary shares 10,000
Li & Fung (Retailing) Limited ordinary shares 3,384,372
Li & Fung (Singapore) Pte Limited ordinary shares 25,000
Li & Fung (South Asia) Limited ordinary shares 2
Li & Fung (Taiwan) Limited ordinary shares 6,300,000
Li & Fung (Thailand) Limited ordinary shares 1,200,000
Li & Fung (Trading) Limited ordinary shares 2
non-voting deferred shares 100,000
Li & Fung (Warehousing) Limited ordinary shares 2
Li & Fung (Zhanjiang) Limited
*
registered capital US$1,999,055
Li & Fung Agencia de Compras em Portugal,
Limitada
quotas 2 (Note 4)
Li & Fung Apparel (North America) Limited ordinary shares 100
Li & Fung China Investments Limited ordinary shares 1,076,000
Li & Fung Development (China) Limited ordinary shares 2
Li & Fung Development (PRC) Limited ordinary share 1
Li & Fung Development Limited ordinary shares 2
Li & Fung Distribution (Asia) Limited ordinary share 1
Li & Fung Distribution (China) Limited ordinary share 1
Li & Fung Distribution (International) Limited ordinary share 1
Li & Fung Distribution (Malaysia) Limited ordinary share 1
Li & Fung Distribution (Management) Limited ordinary shares 2
Li & Fung Distribution (Overseas) Sdn Bhd ordinary shares 2
Li & Fung Distribution (Singapore) Limited ordinary shares 50,000
APPENDIX GENERAL INFORMATION
— 32 —
Name of corporation
Class and/ordescriptionsof securities Balance
Li & Fung Enterprise Development
(Shenzhen) Company Limited
*
registered capital HK$10,000,000
Li & Fung IDS Logistics Limited ordinary shares 24,000,000
Li & Fung Industrial Holdings Limited ordinary shares 9,400,000
Li & Fung Industrial Limited ordinary shares 2
non-voting deferred shares 80,000,000
Li & Fung Investments (B.V.I.) Limited ordinary share 1
Li & Fung JDH Healthcare Limited ordinary shares 2
Li & Fung JDH Limited ordinary shares 50
non-voting deferred shares 1,500,000
Li & Fung Management Services Limited ordinary shares 100
Li & Fung Marketing (Hong Kong) Limited ordinary shares 2
Li & Fung Mumessillik, Pazarlama Limited
Sirketi
ordinary shares 1,000
Li & Fung Pacific Holdings Limited ordinary shares 25,371,016
Li & Fung Packaging Limited ordinary shares 2
Li & Fung Retailing (Malaysia) Sdn Bhd ordinary shares 2
Li & Fung Retailing (Singapore) Pte Limited ordinary shares 2
Li & Fung South Africa (Proprietary) Limited ordinary shares 100
Li & Fung Taiwan Holdings Limited ordinary shares 287,996,000
Li & Fung Taiwan Investments Limited ordinary shares 4,912,180
Lifung County Seat Limited ordinary shares 2
Lifung DistriCenters Management Limited ordinary shares 3
Lifung DistriCenters Trading Limited ordinary shares 10,000
Lifung Express Limited ordinary A share 1
ordinary B share 1
Lifung Structure Limited ordinary shares 2
LiFung.Com Limited ordinary shares 2
Lineament Company Limited ordinary shares 2
Livring Limited ordinary shares 2,500
Lloyd Manufacturing Limited ordinary shares 2
Lloyd Textile Trading Limited ordinary shares 1,000,000
Luma Trading Limited ordinary shares 60
Lux Plush Enterprises Limited ordinary shares 250,000
Maclaine (Singapore) Pte Limited ordinary shares 725,000
Maclaine Limited ordinary shares 557,015
Malinch Associate Holdings Sdn Bhd ordinary shares 22,000,000
Manling Property Limited ordinary shares 11,000,002
APPENDIX GENERAL INFORMATION
— 33 —
Name of corporation
Class and/ordescriptionsof securities Balance
Mercury (BVI) Holdings Limited ordinary share 1
Mighty Hurricane Holdings Inc. common stock 100
preferred stock 100
Millwork Asia, Limited ordinary shares 1,000
Mobilia Limited ordinary shares 2
Moda Lifestyle Limited ordinary shares 491
preference shares 49,510
Moutrie Trading Sdn Bhd ordinary shares 10,000,000
N.E.A.L. Incorporated N.V. ordinary B shares 6,000
Nanjing Gilman Home Appliances Limited
*
registered capital RMB1,425,000
Nanjing JDH Logistics Services
Company Limited
*
registered capital US$2,000,000
Nanjing JDH Trading Company Limited
*
registered capital RMB2,850,000
Nanjing Li & Fung JDH Trading
Company Limited
*
registered capital US$4,900,000
Neptune Pacific Limited ordinary share 1
New Investment Corporation ordinary shares 4,071
Northpoint Properties Sdn Bhd ordinary shares 2
Ocean Choice Properties Limited ordinary share 1
Orient Ocean Holdings Limited class A share 1
P.T. Lifung Indonesia ordinary shares 250
Paco Trading (International) Limited ordinary shares 2
Perfect Trading Inc. ordinary shares 14,880
Pinstripe Sourcing Limited ordinary share 1
PKNS-LFD Sdn Bhd ordinary shares 7,350,000
PNA Product Network (Thailand) Limited ordinary shares 2,000
preference shares 2,100
Pottrix Trading Limited ordinary share 1
Product Development Partners Limited ordinary shares 2
Product Network Asia Limited ordinary shares 2
Promising Development Limited ordinary shares 2
Prosper Development Limited ordinary shares 2
Ratners Enterprises Limited ordinary share 1
Reading Industries Limited ordinary shares 100
Romanov Company Limited ordinary shares 2
APPENDIX GENERAL INFORMATION
— 34 —
Name of corporation
Class and/ordescriptionsof securities Balance
Sandakan Developments Sdn Bhd ordinary shares 210,000
Sebor (Sabah) Marketing & Services Sdn Bhd ordinary shares 9,850,000
Sebor (Sabah) Sdn Bhd ordinary shares 4,400,000
Sebor (Sarawak) Sdn Bhd ordinary shares 3,801,334
Shanghai IDS Distribution Company Limited
*
registered capital US$3,100,000
Shanghai IDS Shen Hong Logistics
Company Limited
*
registered capital US$4,000,000
Shanghai Land Ocean IDS Logistics
Company Limited
*
registered capital RMB19,915,000
Shanghai New Asia Business System
Company Limited
*
registered capital US$300,000
Shiu Fung Fireworks Company Limited ordinary A shares 11,000
ordinary B shares 11,000
Sichling B.V. ordinary shares 50
Sky Million International Limited ordinary shares 2
Slumberland (M) Sdn Bhd ordinary shares 2,000,000
Slumberland (S) Pte Limited ordinary shares 400,000
Slumberland (Thailand) Limited ordinary shares 4,900
preference shares 5,100
Slumberland Asia Pacific Limited ordinary share 800,000
Slumberland China Limited ordinary shares 500,000
Slumberland Harbin Company Limited
*
registered capital RMB3,278,000
Slumberland Marketing Sdn Bhd ordinary shares 2
Slumberland Soft Furniture Shanghai
Company Limited
*
registered capital US$1,100,000
Strategic Assets Limited ordinary share 1
Studio Direct Limited ordinary shares 2
Studio LF, L.P. (Partnership) capital contribution US$62,999,999
Swift Return (Hong Kong) Limited ordinary shares 4,500,000
Swift Return Investments Limited ordinary share 1
Tantallon Enterprises Limited ordinary share 1
Texnorte II - Industrias Texteis, Limitada quotas 3 (Note 5)
Texnorte Industrial Limited ordinary shares 2
APPENDIX GENERAL INFORMATION
— 35 —
Name of corporation
Class and/ordescriptionsof securities Balance
The Borneo Company (Sabah) Sdn Bhd ordinary shares 7,500,000
The Borneo Company Limited ordinary shares 4,553,300
The Borneo Company Pte Limited ordinary shares 8,836,152
The Millwork Trading Company Limited 9.5% preferred stock 17
common stock 100
Towards Perfect Company Limited ordinary shares 2
Toy Island (USA) Inc. common shares 100
Toy Island Manufacturing Company Limited ordinary shares 6,200,000
Toys “R” Us - Lifung Limited ordinary shares 81,000,000
Toys “R” Us - Lifung Taiwan Limited ordinary shares 34,000,000
Toys “R” Us - Singapore (Pte) Limited ordinary shares 4,000,000
Toys “R” Us (Malaysia ) Sdn Bhd ordinary shares 8,400,000
Toys “R” Us Asia Limited ordinary shares 2
Toys (Labuan) Holding Limited ordinary share 1
Toys (Labuan) Limited ordinary shares 17,148,047
Toys LiFung Limited ordinary shares 2
Toys Lifung Netherlands B.V. ordinary shares 182
Trademart Wholesale Limited class A shares 255,000
class B shares 200,000
T-T Martech Sdn Bhd ordinary shares 80,000
Ultimate Quest Limited ordinary shares 2
Verity Enterprises Limited ordinary shares 200,000
Viagold International Limited ordinary share 1
W S Trading Limited ordinary shares 100,000
Web-Logistic (HK) Limited ordinary shares 12,792,000
Win Certain Limited ordinary shares 2
Workbase Limited ordinary shares 2
WS (Trading) Inc. common stock 100
Yau Kit Company Limited ordinary shares 2
* the legal name of the relevant company is in Chinese
Notes:
(1) 2 quotas in issue comprising 1 quota of Patacas 9,000 and 1 quota of Patacas 1,000.
APPENDIX GENERAL INFORMATION
— 36 —
(2) 8 quotas in issue comprising :
1 quota of Patacas 69,000
1 quota of Patacas 5,000
1 quota of Patacas 5,000
1 quota of Patacas 1,000
1 quota of Patacas 5,000
1 quota of Patacas 5,000
1 quota of Patacas 5,000
1 quota of Patacas 5,000
(3) 3 quotas in issue comprising:
1 quota of Euro 2,000
1 quota of Euro 1,500
1 quota of Euro 1,500
(4) 2 quotas in issue comprising 1 quota of Portuguese Escudo 19,980,000 and 1 quota of Portuguese Escudo
20,000.
(5) 3 quotas in issue comprising:
1 quota of Euro 2,000
1 quota of Euro 1,500
1 quota of Euro 1,500
Save as disclosed above, as at the Latest Practicable Date, none of the Directors or any of
their associates had any interests in any equity or debt securities of the Company or any of its
associated corporations.
3. MATERIAL CHANGES
The Directors are not aware of any material change in the financial and trading position of the
Group since 31 December 2002, the date when the latest published audited accounts of the Company
were made up.
4. EXPERT
(a) The following is the qualification of the expert who has given its opinion or advice which
is contained in this circular:
Name Qualification
Watterson Asia Registered investment adviser and registered dealer
(b) The Expert does not have any shareholding, directly or indirectly, in any member of the
Group or any right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe for securities in any member of the Group.
(c) The Expert has given and has not withdrawn its written consent to the issue of this circular
with the inclusion of its letter and references to its name in the form and context in which
they are included.
APPENDIX GENERAL INFORMATION
— 37 —
App. 1B(5)
(d) The letter and recommendation given by the Expert are given as of the date of this circular
for incorporation herein.
5. PARTICULARS OF DIRECTORS’ SERVICE CONTRACTS
Each of the executive Directors has entered into a service contract with the Company for an
initial term of three years commencing on 1 January 2001 and may continue thereafter subject at all
times (including the initial three years period) to terminate by not less than three months’ prior notice
in writing by either party on the other.
Save as disclosed, none of the Directors has entered into any service contracts with any member
of the Group which is not determinable by the Group within one year without payment of
compensation, other than the statutory compensation.
6. DIRECTORS’ INTEREST IN CONTACTS
None of the Directors is materially interested in any contracts or arrangements entered into by
any member of the Group subsisting at the date of this circular which are significant in relation to the
business of the Group.
7. SPONSOR’S INTEREST
As updated and notified by the Company’s sponsor, BNP Paribas Peregrine Capital Limited (the
“Sponsor”), as at the Latest Practicable Date, the Sponsor held 30,000 Shares.
Save as disclosed above, as at the Latest Practicable Date, neither the Sponsor nor its directors
or employees or associates (as referred to in Note 3 to Rule 6.35 of the GEM Listing Rules) had any
interests in the securities of the Company or any member of the Group or any rights to subscribe for
or to nominate persons to subscribe for the securities of the Company or any member of the Group
as at the Latest Practicable Date.
Pursuant to the agreement dated 9 January 2001 entered into between the Company and the
Sponsor, the Sponsor will receive usual sponsorship fees for acting as the Company’s retained sponsor
for the period from 18 January 2001 to 31 December 2003.
8. LITIGATION
No member of the Group is engaged in any litigation or arbitration of material importance and
no litigation or claim of material importance is known to the Directors to be pending or threatened
against any member of the Group.
APPENDIX GENERAL INFORMATION
— 38 —
App. 1B(39)
App. 1B(40)(2)
R. 20.47(11)R. 6.36
9. SIGNIFICANT INTERESTS IN THE GROUP
So far as the Directors are aware as at the Latest Practicable Date, the persons (not being
Directors or the chief executive officer of the Company) who will be directly or indirectly interested
in 10% or more of the nominal value of any class of share capital carrying rights to vote in all
circumstances at general meeting of any member of the Group will be as follows:
Name of the Shareholder Name of companyNumber of
shares
Percentage ofinterest in the
company
LFR The Company 373,692,000 55.95%
LF (1937) (Note 1) The Company 373,692,000 55.95%
King Lun Holdings Limited
(Note 2)
The Company 373,692,000 55.95%
J.P. Morgan Trust Company
(Jersey) Limited (Note 3)
The Company 373,692,000 55.95%
Masterpiece, Inc. Web-Logistic (HK)
Limited
2,808,000 18.00%
Notes:
(1) LFR is a wholly-owned Subsidiary of LF (1937).
(2) LF (1937) is a wholly-owned Subsidiary of King Lun Holdings Limited.
(3) 1,332,840 shares in King Lun Holdings Limited, representing 50% of its issued share capital, are owned by J.P.
Morgan Trust Company (Jersey) Limited (formerly known as Chase Bank & Trust Company (CI) Limited), the
trustee of a trust established for the benefit of the family members of Dr. Fung Kwok King, Victor.
10. GENERAL
(a) The branch share registrar and transfer office in Hong Kong of the Company is Abacus
Share Registrars Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56
Gloucester Road, Wanchai, Hong Kong.
(b) The registered office of the Company is at Century Yard, Cricket Square, Hutchins Drive,
P. O. Box 2681GT, George Town, Grand Cayman, British West Indies.
(c) The head office and principal place of business of the Company is at 12th Floor, LiFung
Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong.
APPENDIX GENERAL INFORMATION
— 39 —
App. 1B(38)(3)
11. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection during normal business hours up
to and including 28 April 2003 at the principal place of business of the Company at 12th Floor, LiFung
Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong:
(a) the New Leases; and
(b) the Directors’ service contracts as referred to under the paragraph “Particulars of Directors’
Service Contracts’.
12. MISCELLANEOUS
The English text of this circular and the form of proxy shall prevail over the Chinese text.
APPENDIX GENERAL INFORMATION
— 40 —
App. 1B(42)(2)
CONVENIENCE RETAIL ASIA LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of Convenience Retail Asia
Limited (the “Company”) will be held at the Auditorium, 12th Floor, LiFung Centre, 2 On Ping Street,
Siu Lek Yuen, Shatin, New Territories, Hong Kong on Monday, 28 April 2003 at 4:00 p.m. for the
following purposes:
1. to receive and consider the audited consolidated financial statements and the reports of the
Directors and auditors of the Company and its subsidiaries for the year ended 31 December
2002;
2. to re-elect Directors;
3. to re-appoint auditors and authorise the Directors to fix their remuneration;
4. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT:
(a) subject to paragraph (c) of this Resolution, and pursuant to the Rules Governing the
Listing of Securities on The Growth Enterprise Market of The Stock Exchange of
Hong Kong Limited, the exercise by the Directors of the Company during the Relevant
Period (as hereinafter defined) of all the powers of the Company to allot, issue and
deal with additional shares in the capital of the Company and to make or grant offers,
agreements and options which might require the exercise of such powers be and the
same is hereby generally and unconditionally approved;
(b) the approval in paragraph (a) of this Resolution shall authorise the Directors during
the Relevant Period to make or grant offers, agreements and options which might
require the exercise of such powers after the end of the Relevant Period;
(c) the aggregate nominal amount of share capital allotted or agreed conditionally or
unconditionally to be allotted (whether pursuant to options or otherwise) by the
Directors pursuant to the approval in paragraph (a) of this Resolution, otherwise than
pursuant to (i) a Rights Issue (as defined below); or (ii) the exercise of any options
granted under the pre-IPO share option plan adopted by the Company on 27 December
2000 or the grant or exercise of any option under the share option scheme adopted by
NOTICE OF ANNUAL GENERAL MEETING
— 41 —
the Company on 6 January 2001 and amended by resolution of the shareholders of the
Company on 24 April 2002 or any other option scheme or similar arrangement for the
time being adopted for the grant or issue of shares or rights to acquire shares of the
Company; or (iii) any scrip dividend or similar arrangement providing for the
allotment of shares in lieu of the whole or part of a dividend on shares in accordance
with the Articles of Association of the Company in force from time to time; or (iv) the
exercise of rights of subscription or conversion under the terms of any existing
warrants of the Company or any existing securities of the Company which are
convertible into shares of the Company, shall not exceed the aggregate of:
(aa) 20% of the aggregate nominal amount of the share capital of the Company in
issue on the date of the passing of this Resolution; and
(bb) (if the Directors are so authorised by a separate ordinary resolution of the
shareholders of the Company) the nominal amount of any share capital of the
Company repurchased by the Company subsequent to the passing of this
Resolution (up to a maximum equivalent to 10% of the aggregate nominal
amount of the share capital of the Company in issue on the date of the passing
of this Resolution).
and the authority pursuant to paragraph (a) of this Resolution shall be limited
accordingly; and
(d) for the purpose of this Resolution:
“Relevant Period” means the period from the date of the passing of this Resolution
until whichever is the earliest of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the
Company is required by the Memorandum and Articles of Association of the
Company, or any other applicable law of the Cayman Islands, to be held; and
(iii) the passing of an ordinary resolution by the shareholders of the Company in
general meeting revoking or varying the authority given to the Directors by this
Resolution.
“Rights Issue” means an offer of shares in the Company, or offer or issue of warrants,
options or other securities giving rights to subscribe for shares, open for a period fixed
by the Directors to holders of shares in the Company on the register on a fixed record
date in proportion to their holdings of shares (subject to such exclusion or other
arrangements as the Directors may deem necessary or expedient in relation to
fractional entitlements, or having regard to any restrictions or obligations under the
NOTICE OF ANNUAL GENERAL MEETING
— 42 —
laws of, or the requirements of, or the expense or delay which may be involved in
determining the existence or extent of any restrictions or obligations under the laws
of, or the requirements of, any jurisdiction applicable to the Company, or any
recognized regulatory body or any stock exchange applicable to the Company)”;
5. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT:
(a) subject to paragraph (b) of this Resolution, the exercise by the Directors of the
Company during the Relevant Period (as hereinafter defined) of all powers of the
Company to purchase its shares on The Growth Enterprise Market of The Stock
Exchange of Hong Kong Limited or any other stock exchange on which the shares of
the Company may be listed and which is recognized by the Securities and Futures
Commission and The Stock Exchange of Hong Kong Limited for such purpose, in
accordance with the rules and regulations of the Securities and Futures Commission,
The Stock Exchange of Hong Kong Limited and any such other stock exchange from
time to time and all applicable laws in this regard, be and the same is hereby generally
and unconditionally approved;
(b) the aggregate nominal amount of shares of the Company which may be purchased by
the Company pursuant to the approval in paragraph (a) of this Resolution during the
Relevant Period shall not exceed 10% of the aggregate nominal amount of the issued
share capital of the Company as at the date of the passing of this Resolution and the
authority pursuant to paragraph (a) of this Resolution shall be limited accordingly;
and
(c) for the purpose of this Resolution, “Relevant Period” means the period from the date
of the passing of this Resolution until whichever is the earliest of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the
Company is required by the Memorandum and Articles of Association of the
Company, or any other applicable law of Cayman Islands, to be held; and
(iii) the passing of an ordinary resolution by the shareholders of the Company in
general meeting revoking or varying the authority given to the Directors of the
Company by this Resolution”;
NOTICE OF ANNUAL GENERAL MEETING
— 43 —
6. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT the Directors be and they are hereby authorised to exercise the authority referred
to in paragraph (a) of Resolution no.4 set out in the notice convening this meeting in respect
of the share capital of the Company referred to in sub-paragraph (bb) of paragraph (c) of
such Resolution”;
7. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT the services agreement dated 20 March 2002 (as defined as the “New Services
Agreement” in the circular to the shareholders of the Company dated 28 March 2002), a
copy of which marked “A” has been produced to this Meeting and signed by the Chairman
hereof for the purpose of identification, and entered into between Li & Fung (Retailing)
Limited (“LFR”), the substantial and a management shareholder of the Company, and Circle
K Convenience Stores (HK) Limited (“Circle K (HK)”), a wholly-owned subsidiary of the
Company, for the provision by LFR to Circle K (HK) of services relating to finance and
accounting, management information systems, human resources, real estate and other
administrative support be and is hereby approved, ratified and confirmed AND THAT the
Directors be and are hereby authorised to do all acts and things which they consider
necessary and expedient for the implementation of and giving effect to the services
agreement provided that the aggregate consideration payable thereunder in any financial
year will not exceed HK$15,500,000”;
8. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT the purchase agreement dated 20 March 2002 (as defined as the “New Purchase
Agreement” in the circular to the shareholders of the Company dated 28 March 2002), a
copy of which marked “B” has been produced to this Meeting and signed by the Chairman
hereof for the purpose of identification, and entered into between JDH (Hong Kong)
Limited, an indirect subsidiary of the immediate holding company of Li & Fung (Retailing)
Limited, the substantial and a management shareholder of the Company, and Circle K
Convenience Stores (HK) Limited (“Circle K (HK)”), a wholly-owned subsidiary of the
Company, for the purchase of products by Circle K (HK) from JDH (Hong Kong) Limited
on its standard terms of business be and is hereby approved, ratified and confirmed ANDTHAT the Directors be and are hereby authorised to do all acts and things which they
consider necessary and expedient for the implementation of and giving effect to the
purchase agreement provided that the aggregate consideration payable in respect thereof in
any financial year will not exceed HK$17,000,000”;
9. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT the New Circle K (HK) Lease (as defined in the circular to the shareholders of the
Company dated 31 March 2003 (the “Circular”)), a copy of which marked “C” has been
NOTICE OF ANNUAL GENERAL MEETING
— 44 —
produced to this Meeting and signed by the Chairman hereof for the purpose of
identification, entered into between Bomaron Limited, Li & Fung Distribution
(Management) Limited (“LF (Management)”), each an indirect fellow subsidiary of Li &
Fung (Retailing) Limited, the substantial and a management shareholder of the Company,
and Circle K Convenience Stores (HK) Limited (“Circle K (HK)”), a wholly-owned
subsidiary of the Company, for (a) the early termination of the Existing Circle K (HK)
Lease (as defined in the Circular) in respect of the premises, being a portion of 5th Floor,
LiFung Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, New Territories, Hong Kong with
a gross floor area of 20,723 sq.ft. with effect from 1 May 2003; and (b) the immediate lease
of the same premises by LF (Management) to Circle K (HK) for a term commencing on 1
May 2003 and expiring on 31 May 2004 be and is hereby approved, ratified and confirmed
AND THAT the Directors be and are hereby authorised to do all acts and things which they
consider necessary and expedient for the implementation of and giving effect to the New
Circle K (HK) Lease provided that the aggregate consideration payable thereunder for each
of the two years ending 31 December 2004 will not exceed HK$2,000,000 and HK$840,000
respectively”; and
10. as special business, to consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
“THAT the New Web-Logistic Lease (as defined in the circular to the shareholders of the
Company dated 31 March 2003 (the “Circular”)), a copy of which marked “D” has been
produced to this Meeting and signed by the Chairman hereof for the purpose of
identification, entered into between Bomaron Limited, Li & Fung Distribution
(Management) Limited (“LF (Management)”), each an indirect fellow subsidiary of Li &
Fung (Retailing) Limited, the substantial and a management shareholder of the Company,
and Web-Logistic (HK) Limited (“Web-Logistic (HK)”), a subsidiary of the Company, for
(a) the early termination of the Existing Web-Logistic Lease (as defined in the Circular) in
respect of the premises, being a portion of 5th Floor, LiFung Centre, 2 On Ping Street, Siu
Lek Yuen, Shatin, New Territories, Hong Kong with a gross floor area of 12,667 sq.ft. with
effect from 1 May 2003; and (b) the immediate lease of the same premises by LF
(Management) to Web-Logistic (HK) for a term commencing on 1 May 2003 and expiring
on 31 May 2004 be and is hereby approved, ratified and confirmed AND THAT the
Directors be and are hereby authorised to do all acts and things which they consider
necessary and expedient for the implementation of and giving effect to the New
Web-Logistic Lease provided that the aggregate consideration payable thereunder for each
of the two years ending 31 December 2004 will not exceed HK$1,200,000 and HK$500,000
respectively”.
On behalf of the Board
Fung Kwok King, VictorChairman
Hong Kong, 31 March 2003
NOTICE OF ANNUAL GENERAL MEETING
— 45 —
Principal Place of Business:
12th Floor, LiFung Centre
2 On Ping Street
Siu Lek Yuen
Shatin
New Territories
Hong Kong
Notes:
1. A shareholder entitled to attend and vote at the meeting is entitled to appoint a person or persons
as his proxy or proxies to attend and, on a poll, vote instead of him. A proxy need not be a
shareholder of the Company.
2. To be valid, a form of proxy, together with the power of attorney or other authority (if any) under
which it is signed or a notarially certified copy of that power of attorney or authority, must be
deposited with the Company’s Hong Kong branch share registrar, Abacus Share Registrars
Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai,
Hong Kong, not less than 48 hours before the time appointed for holding the meeting or any
adjourned meeting, and in default thereof the form of proxy shall not be treated as valid. No
instrument appointing a proxy shall be deposited using electronic means. No instrument
appointing a proxy shall be valid after the expiry of 12 months from the date of its execution.
3. Delivery of an instrument appointing a proxy shall not preclude a shareholder from attending and
voting in person at the meeting, and in such event the instrument appointing a proxy shall be
deemed to be revoked.
NOTICE OF ANNUAL GENERAL MEETING
— 46 —
CONVENIENCE RETAIL ASIA LIMITED
(Incorporated in the Cayman Islands with limited liability)
PROXY FORMForm of proxy for use at the Annual General Meeting to be held at the Auditorium, 12th Floor, LiFung Centre, 2 On PingStreet, Siu Lek Yuen, Shatin, New Territories, Hong Kong on 28 April 2003 at 4:00 p.m.
I/We,1
of
being the registered holder(s) of2 shares of HK$0.10 each in in capital of the
above-named Company (the “Company”), hereby appoint3
ofor failing him, the Chairman of the Meeting as my/our proxy to attend and vote for me/us and on my/our behalf at the AnnualGeneral Meeting of the Company to be held at the Auditorium, 12th Floor, LiFung Centre, 2 On Ping Street, Siu Lek Yuen,Shatin, New Territories, Hong Kong on 28 April 2003 at 4:00 p.m. and at any adjournment thereof on the undermentionedresolutions as indicated:
RESOLUTION FOR4 AGAINST 4
1. To receive and consider the audited financial statements and the reports ofthe Directors and auditors of the Company and its subsidiaries for the yearended 31 December 2002
2. To re-elect Directors
3. To re-appoint auditors and authorise the Directors to fix their remuneration
4. To grant a general mandate to the Directors to issue new shares
5. To grant a general mandate to the Directors to repurchase shares
6. To extend the general mandate to issue new shares by adding the number ofshares repurchased
7. To approve, ratify and confirm the services agreement dated 20 March 2002between Li & Fung (Retailing) Limited and Circle K Convenience Stores(HK) Limited and the aggregate consideration thereof
8. To approve, ratify and confirm the purchase agreement dated 20 March 2002between JDH (Hong Kong) Limited and Circle K Convenience Stores (HK)Limited and the aggregate consideration thereof
9. To approve, ratify and confirm the letter agreement dated 20 March 2003between Bomaron Limited, Li & Fung Distribution (Management) Limitedand Circle K Convenience Stores (HK) Limited and the aggregateconsideration thereof
10. To approve, ratify and confirm the letter agreement dated 20 March 2003between Bomaron Limited, Li & Fung Distribution (Management) Limitedand Web-Logistic (HK) Limited and the aggregate consideration thereof
Dated this day of 2003
Signature5
Notes:
(1) Full name(s) and address(es) to be inserted in BLOCK CAPITALS.(2) Please insert the number of shares registered in your name(s). If no number is inserted, this form of proxy will be deemed to relate to
all the shares in the Company registered in your name(s).(3) Please insert the name of the proxy desired. If no name is inserted, the Chairman of the Meeting will act as your proxy. Any alteration
made to this form of proxy must be initialled by the person(s) who signs it.(4) Please indicate with an “X” in the appropriate space beside each of the resolutions how you wish the proxy to vote on your behalf on a
poll. If this form is returned duly signed, but without any indication, the proxy will vote for or against the resolution or will abstain, athis discretion.
(5) This form of proxy must be signed by you or your attorney duly authorised in writing or, in the case of a corporation, must be either underits common seal or under the hand of an officer or attorney duly authorised.
(6) In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy will be accepted to the exclusionof the votes of the other joint holders. For this purpose seniority is determined by the order in which the names stand in the Register ofMembers in respect of the joint holding.
(7) To be valid this form of proxy together with any power of attorney or other authority (if any) under which it is signed or a notariallycertified copy of such power or authority shall be deposited with the Company’s Hong Kong branch share registrar, Abacus ShareRegistrars Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than48 hours before the time appointed for holding the Meeting or any adjourned Meeting. This form of proxy must not be deposited usingelectronic means.
(8) A proxy need not be a member of the Company but must attend the Meeting in person to represent you.